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THE SECURITIES ACT |
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Order No. 7118 |
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Section 20(1) |
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June 1, 2015 |
Exemption for certain End Users from trade reporting requirements in Manitoba Securities Commission Rule 91-507
WHEREAS:
(A) Staff has applied to The Manitoba Securities Commission (the “Commission”) for an order under subsection 20(1) of The Securities Act, R.S.M. 1988, c. S50 (the “Act”) that certain End Users (as defined below) be exempt from Part 3 of Manitoba Securities Commission Rule 91-507 Trade Repositories and Derivatives Data Reporting (“91-507”) (the “TR Requirement”) on certain conditions.
(B) Under subsection 26(1) of 91-507, a reporting counterparty to a transaction involving a local counterparty must report, or cause to be reported, the data required to be reported under Part 3 of 91-507 to a designated trade repository.
(C) Under subsection 43(4) of 91-507, a reporting counterparty that is not a derivatives dealer, a recognized or exempt clearing agency or a Canadian financial institution (an “End User”) is not subject to the requirements of Part 3 of 91-507 until June 30, 2015.
(D) The Commission, along with other Canadian jurisdictions which have reporting requirements similar to the TR Requirement are considering developing amendments to 91-507 to provide an exemption for End Users that are engaged in transactions with affiliated counterparties on certain conditions.
(E) While developing the amendment to 91-507, the Commission is of the view it would be appropriate to provide a limited exemption from the TR Requirement in limited circumstances.
(F) The Commission is of the opinion that it is in the public interest to make this order.
IT IS ORDERED:
1. THAT, pursuant to subsection 20(1) of the Act, an End User is exempt from the requirement to report a transaction under subsection 26(1) of 91-507 provided that:
(a) the transaction to which the End User is a party is between the End User and a counterparty which is an affiliated company, if the financial statements of the parties to the transaction are prepared on a consolidated basis in accordance with the accounting principles, as defined in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards;
(b) the transaction is governed by a written agreement setting out the terms of the transaction including terms relating to centralized evaluation, measurement and risk controls designed to identify and manage risks; and
(c) The parties to the transaction maintain records of the transaction and will make such records available to the Commission upon request.
2. THAT, this order will expire on the date that amendments to 91-507 come into force with respect to the subject matter of this order.
BY ORDER OF THE COMMISSION
Director